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Public employees face wrath of strapped taxpayers

Union contracts criticized amid budget crisis

By Michael Powell
New York Times / January 2, 2011

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FLEMINGTON, N.J. — Ever since Marie Corfield’s confrontation with Governor Chris Christie this fall over the state’s education cuts became a YouTube classic, she has received a stream of vituperative e-mails and Facebook postings.

“People I don’t even know are calling me horrible names,’’ said Corfield, an art teacher who had pleaded the case of struggling teachers. “The mantra is that the problem is the unions, the unions, the unions.’’

Across the nation, a rising irritation with public employee unions is palpable as a wounded economy has blown gaping holes in state, city, and town budgets and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan, and New Jersey, states where public unions wield much power and the culture historically tends to be prolabor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts, and tougher work rules.

It is an angry conversation. Union chiefs, who sometimes persuaded members to take pension sweeteners in lieu of raises, are loath to surrender ground. Taxpayers are split between those who want cuts and those who hope that rising tax receipts might bring easier choices.

And a growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending.

A brutal reckoning awaits, they say.

These battles play out in many corners, but few are more passionate than in New Jersey, where politics tend toward the moderately liberal and nearly 20 percent of the workforce is unionized (compared with less than 14 percent nationally). Property tax and unemployment rates are high, and budgets are pools of red ink.

A new regime in state politics is venting frustration less at Goldman Sachs executives than at unions. Newark recently laid off police officers after they refused to accept cuts, and Camden has threatened to lay off half of its officers in January.

Fred Siegel, a historian at the conservative-leaning Manhattan Institute, has written of the “New Tammany Hall,’’ which he describes as the incestuous alliance between public officials and labor.

“Public unions have had no natural adversary; they give politicians political support and get good contracts back,’’ Siegel said.

Even if that is so, this battle comes woven with complications. Across the nation in the past two years, public workers have experienced furloughs and pay cuts. Local governments shed 212,000 jobs last year.

A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers. The Manhattan Institute, which is not terribly sympathetic to unions, studied New Jersey and concluded that teachers earned wages roughly comparable to what people in the private sector with a similar education earned.

Benefits tend to be the sorest point. From Illinois to New Jersey, politicians have refused to pay into pension funds, creating deeper shortfalls.

And taxpayer resentment simmers.

To venture into Washington Township in southern New Jersey is to walk the frayed line between taxpayers and public employees and to hear anger and ambivalence.

Bill Rahl, a retiree, squints and holds his hand against his throat. “I’m up to here with taxes. I can’t breathe, OK?’’ he says. “I don’t know about asking anyone to give up a pension. Just don’t ask for no more.’’

Christie faced a vast deficit when he took office last January, and much of the federal stimulus aid for schools was exhausted by June. So he cut deeply into state aid for education; Washington Township lost $900,000.

That forced the town to rely principally on property taxes. (Few states lean as heavily on property taxes to finance education; New Jersey ranks 45th in state aid to education.) The town turned its construction office over to a private contractor and shed a few employees.

Assemblyman Paul D. Moriarty, a liberal Democrat, served four years as mayor of Washington Township. As the bill for pension and health benefits for town employees soared, he struggled to explain this to constituents.

“We really should not receive benefits any better than the people we serve,’’ he says. “It leads to a lot of resentment against public employees.’’

All of which can sound logical, except that, as Moriarty also acknowledges, such thinking also “leads to a race to the bottom.’’ That is, as businesses cut private sector benefits, pressure grows on government to cut pay and benefits for its employees.

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